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Tuesday, June 29, 2010

CapitaMalls REIT listing expected to raise RM864mil

PETALING JAYA: CapitaMalls Asia Ltd, one of Asia’s largest listed shopping mall developers, owners and managers by property value and geographic reach, has launched the prospectus and retail portion of what will be the largest shopping mall REIT (real estate investment trust) in Malaysia to date.

Lim Beng Chee ... ‘We see acquisition opportunities in Malaysia’s shopping mall sector.’

CapitaMalls Asia is part of Southeast Asia’s largest property developer Singapore’s CapitaLand Ltd.

The listing of CapitaMalls Malaysia Trust (CMMT) REIT on the Main Market of Bursa Malaysia on July 16 is expected to have a market capitalisation of RM1.4bil if an over-allotment option of up to 15% of the offering of 786 million units is exercised. If this portion is not exercised, it may raise RM864mil.

Its initial portfolio of three shopping malls – Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor – has a total net lettable area of 1.88 million sq ft and has been valued at RM2.13 bil.

The CMMT IPO will have a total of 1.35 billion units in issue, of which 719 million units were offered to institutional investors at between RM1 and RM1.10 each in late June and 67.5 million units for individual investors at an indicative price of RM1.08 yesterday, with a forecast distribution yield of 6.9% for 2011. The final price will be determined on July 8.

CapitaMalls Asia CEO Lim Beng Chee told a press conference that occupancy and rental yields had increased for all three malls in its stable despite a weak economy in the last two years.

“We see acquisition opportunities in Malaysia’s shopping mall sector, with its fragmented ownership structure.

“CapitaMalls Asia will give CMMT a right of first refusal over any retail properties that we may acquire in future, including the extension that is being carried out at Penang’s Gurney Plaza. If acquired, Gurney Plaza extension will increase CMMT’s asset size by about 11%,” he said.

CIMB Investment Bank Bhd, JPMorgan Chase & Co and Maybank Investment Bank Bhd are jointly managing the IPO sale.

“As part of our long-term commitment, CapitaMalls Asia also plans to set up a Malaysia retail property fund to acquire and develop retail properties in Malaysia. CMMT will similarly have a right of first refusal over this pipeline of retail properties,” Lim said.

Individual investors will get a refund if the final price for institutional investors is lower than the retail price.

CMMT’s sponsor, CapitaMalls Asia Ltd, will retain a stake of 41.74% in CMMT.

If an over-allotment option of up to 117 million units is exercised, CapitaMalls Asia’s stake in CMMT will be 33%.

The IPO follows the RM1.5bil raised by Sunway Real Estate Investment Trust in its initial sale last week and underscores rising investor appetite for equities in Malaysia amid an economic rebound.

By The Star

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